Are Green Jobs For Real?: Special Report

From pure optimism to extreme skepticism, few contemporary buzzwords elicit such polarizing emotions as "green jobs." Proponents say these jobs will ease not only unemployment but also climate change and the nation's dependence on foreign oil. Skeptics question the sustainability of green jobs and the government's ability to identify game-changing technologies. By some counts, we can look forward to 5 million green jobs; by others, any surplus will be far outweighed by a net loss of jobs in other fields.

Most Read

The first step in cutting through the hype surrounding green jobs is simply to define them. Some workers, such as energy auditors and solar-panel installers, have plied their trades for decades. But even jobs in emerging fields, such as smart-grid and electric vehicle development, repurpose age-old professions such as electrician, mechanic and engineer. If you count all the people working in clean energy, environmentally friendly production, energy efficiency and pollution mitigation—as the Pew Center on the States recently did—and discount the people indirectly linked to those fields, such as accountants, there were 770,000 green jobs in the U.S. in 2007. (Nuclear energy also wasn't counted.) In contrast, there were 1.3 million people working in fossil-fuel sectors.

If measured against every job out there, green jobs account for just 0.49 percent of employment. But Kil Huh, a project director at Pew, says the sector grew rapidly from 1998 to 2007. During that period the overall economy grew 3.7 percent, while green jobs grew 9.1 percent. And according to the Economic Policy Institute's Ethan Pollack, green jobs tend to be durable and better-paying. "Green investment results in a higher mix of production jobs," Pollack says, "and pushes against a decades-long trend of manufacturing jobs disappearing and low-paying service jobs taking their place."

This initial robust growth was fueled primarily by private investment. Ernst & Young, a firm that provides strategic guidance for clean technology companies, found that as of June 2008, 301 companies in the sector had attracted $7.3 billion in venture capital. Although the recession caused funding to drop nearly 50 percent in the first three months of 2009 from the same period in 2008—overall venture capital decreased 61 percent, according to Pew—that early boost may help green companies better weather the downturn. "The clean energy economy was one of the few sectors that was better insulated," Huh says. "Because of the increased spending at the federal level, its recovery should be a lot faster."

Roughly $84 billion of the $787 billion American Recovery and Reinvestment Act of 2009 has been allocated to initiatives, such as weatherization and battery research, aimed at stimulating green jobs. Already clean tech is showing signs of revival. Ernst & Young found second-quarter venture capital in the sector was up 73 percent from the first quarter, thanks, in part, to confidence stemming from increased government support. Jen Stutsman, a representative for the Department of Energy, which is responsible for disbursing nearly $37 billion in stimulus money, says a major goal of the Recovery Act was to "catalyze private investors to make investments in projects they might not otherwise make now."

Yet some question the government's prescience when it comes to selecting worthy projects. Kenneth Green, a fellow at the American Enterprise Institute, cites the failed attempt to supplant fossil fuels with corn-based ethanol as a prime example of a taxpayer-backed swing-and-miss. "The government is not good at picking winners," he says. Richard Sylla, an economic historian at New York University, points to the Carter administration's attempt to promote solar power. "The government subsidized people to put up solar panels," he says, and when the price of oil came down "a lot of government money was wasted."

But today, Sylla says, things might be different. "Even before the government came in, Wall Street and the venture capital crowd were interested," he says. "Maybe solar power in the 1970s was premature, but 40 years later, it might work." And Alex Klein, a research director at the consulting firm Emerging Energy Research, says the difference between ethanol and this round of government intervention is that funding is not confined to one nascent technology. Rather, the Recovery Act money—in the form of federal loan guarantees, grants and tax credits—is spread across a broad range of technologies and companies. "They seem to be conscious that if they're spending the taxpayers' money, they're not spending it on projects that aren't coming to fruition," Klein says.

To weed out duds, Stutsman says reviewers from within the DOE, academia and energy fields carefully scrutinize potential awardees. Just how many jobs those projects create—and how many will be long-term—remains to be seen. For now, the green workforce continues to be a tiny fraction of overall employment, making only a slight dent in unemployment. But with clean energy technologies advancing quickly, a genuine green-collar economy may not be far off.

Green Jobs Growing Fast

Fuel Cell Engineer

Description: Focus on improving the efficiency of fuel cells, which generate electricity from hydrogen and oxygen, for both automotive and stationary applications like emergency power. Training: Bachelor's degree (minimum) or master's degree (preferred) in chemical, electrical or mechanical engineering for research, design, fabrication and testing. Salary: $50,000 to $85,000